Polycom Reports Third Quarter 2011 Earnings
Q3 Revenue Growth of 23 Percent Year-over-Year to a Record $379 Million
Third quarter 2011 consolidated net revenues were a record $379 million, compared to $308 million for the third quarter of 2010. GAAP net income for the third quarter of 2011 was $24 million, or 13 cents per diluted share, compared to $17 million, or 10 cents per diluted share, for the same period last year. Non-GAAP net income for the third quarter of 2011 was $48 million, or 26 cents per diluted share, compared to non-GAAP net income of $34 million, or 19 cents per diluted share, for the third quarter of 2010. Note that the share and per share data for all periods presented in this release have been adjusted to reflect the two-for-one stock split that was effective July 1, 2011.
The reconciliation between GAAP net income and non-GAAP net income is provided in the tables at the end of this release.
On a geographic basis, consolidated net revenues for the third quarter of 2011 were comprised of:
- 52 percent Americas, or $197 million, an increase of 16 percent year-over-year;
- 24 percent Europe, Middle East, and Africa, or $92 million, an increase of 23 percent year-over-year; and
- 24 percent Asia Pacific, or $90 million, an increase of 41 percent year-over-year.
"Polycom has clearly emerged as the premier UC provider that delivers customers a seamless and secure video collaboration solution from immersive telepresence to the desktop to the world's leading mobile devices," said Andrew Miller, Polycom president and CEO. "Leveraging the Polycom RealPresence(TM) Platform, we believe that we are best positioned to capture the network effect of video communications being driven by the demand for real-time collaboration in the workplace and social networks. Our powerful software-based cloud and mobility strategy is beginning to take shape as evidenced by our recent partnership and acquisition announcements."
"Polycom generated significant Q3 revenue growth in the emerging geographies and the US Federal market," said Michael Kourey, Polycom's executive vice president, finance and administration, and CFO. "In addition, our acquisition of HP's visual collaboration solution is already performing well, securing new, large customers in Q3 for Polycom's leading full UC portfolio. Although partially offset by lower year-over-year revenue growth in the enterprise customer segment, Polycom generated solid operating results, including a 37% increase in net income year-over-year. Net of the strategic acquisitions and stock repurchases in the period, Polycom exited Q3 with $540 million in cash and investments and no debt."
Q3 2011 Business Highlights
- Strong revenue growth in emerging geographies-up over 50 percent year-over-year
- Key certifications and momentum with US Federal sector, growing bookings nearly 40 percent year-over-year
- Polycom Open Collaboration Network(TM) partners generated approximately 26 percent of revenues
- Completed HP Visual Collaboration acquisition with excellent initial results
- Unveiled cloud-based software strategy, bringing secure HD video collaboration to the broadest range of business, video, mobile, and social networking applications
- Announced partnership with Jive Software to integrate Polycom HD video into Jive's social business platform
Earnings Call Details
Polycom will hold a conference call today, Oct. 19, 2011, at 5 p.m. EDT/2 p.m. PDT to discuss its third quarter earnings. You may participate by viewing the webcast at www.polycom.com/investors or, for callers in the US and Canada, by calling 800.897.4662; and for callers outside of the US and Canada, by calling 212.231.2915. The pass code for the call is "Polycom." A replay of the call will also be available at www.polycom.com or, for callers in the US and Canada, at 800.633.8284; and for callers outside of the US and Canada, at 402.977.9140. The access number for the replay is 21540950. A replay of the call will be available on www.polycom.com for approximately 12 months.
Forward Looking Statements
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 regarding future events, future demand for our products, and the future performance of the Company, including statements regarding Polycom as being best positioned to capture the network effect of video communications and the drivers for such demand. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the impact of competition on our product sales and for our customers and partners; the impact of increased competition due to consolidation in our industry or competition from companies that are larger or that have greater resources than we do; potential fluctuations in results and future growth rates; risks associated with general economic conditions and external market factors; the market acceptance of Polycom's products and changing market demands, including demands for differing technologies or product and services offerings; our ability to successfully integrate our acquisitions into our business; possible delays in the development, availability and shipment of new products; increasing costs and differing uses of capital; changes in key personnel that may cause disruption to the business; any disruptive impact to the Company that may result from new executive hires; the impact of restructuring actions; and the impact of global conflicts that may adversely impact our business. Many of these risks and uncertainties are discussed in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, and in other reports filed by Polycom with the SEC. Polycom disclaims any intent or obligations to update these forward-looking statements.
Polycom reserves the right to modify future product plans at any time. Products and/or related specifications referenced in this press release are not guaranteed and will be delivered on a when and if available basis.
GAAP to non-GAAP Reconciliation
To supplement our consolidated financial statements presented on a GAAP basis, Polycom uses non-GAAP measures of operating results, net income and income per share, which are adjusted to exclude certain costs, expenses, gains, and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Polycom's underlying operational results and trends, and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses, or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted non-GAAP results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States.
Polycom Germany GmbH
Polycom is the global leader in standards-based unified communications (UC) solutions for telepresence, video, and voice, powered by the Polycom RealPresence platform. The RealPresence platform interoperates with the broadest range of business, mobile and social applications and devices. More than 400,000 organizations trust Polycom solutions to collaborate and meet face to face from any location for more productive and effective engagement with colleagues, partners, customers and prospects. Polycom, together with its broad partner ecosystem, provides customers with the best TCO, scalability, and security - on-premises, hosted or cloud delivered. Visit www.polycom.com or connect with Polycom on Twitter, Facebook, and LinkedIn.